Correlation Between GRIFFIN MINING and Live Nation

Can any of the company-specific risk be diversified away by investing in both GRIFFIN MINING and Live Nation at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining GRIFFIN MINING and Live Nation into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GRIFFIN MINING LTD and Live Nation Entertainment, you can compare the effects of market volatilities on GRIFFIN MINING and Live Nation and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in GRIFFIN MINING with a short position of Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRIFFIN MINING and Live Nation.

Diversification Opportunities for GRIFFIN MINING and Live Nation

-0.62

Correlation Coefficient

GRIFFIN MINING  Live Nation

Excellent diversification

The 3 months correlation between GRIFFIN and Live is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding GRIFFIN MINING LTD and Live Nation Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Nation Entertainment and GRIFFIN MINING is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on GRIFFIN MINING LTD are associated (or correlated) with Live Nation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Nation Entertainment has no effect on the direction of GRIFFIN MINING i.e., GRIFFIN MINING and Live Nation go up and down completely randomly.

Pair Corralation between GRIFFIN MINING and Live Nation

Assuming the 90 days horizon GRIFFIN MINING LTD is expected to generate 1.07 times more return on investment than Live Nation. However, GRIFFIN MINING is 1.07 times more volatile than Live Nation Entertainment. It trades about 0.09 of its potential returns per unit of risk. Live Nation Entertainment is currently generating about 0.09 per unit of risk. If you would invest  85.00  in GRIFFIN MINING LTD on October 5, 2024 and sell it today you would earn a total of  89.00  from holding GRIFFIN MINING LTD or generate 104.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

GRIFFIN MINING LTD  vs.  Live Nation Entertainment

GRIFFIN MINING LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GRIFFIN MINING LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, GRIFFIN MINING is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Live Nation Entertainment

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Live Nation Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, Live Nation reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GRIFFIN MINING and Live Nation

The main advantage of trading using opposite GRIFFIN MINING and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRIFFIN MINING position performs unexpectedly, Live Nation can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Live Nation will offset losses from the drop in Live Nation's long position.

The idea behind GRIFFIN MINING LTD and Live Nation Entertainment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.